Functional Depreciation Law and Legal Definition
Functional depreciation is the depreciation provided as a result of lack of adaptation of an asset to function. It results from change of conditions and surroundings which render the asset ill adapted to its work, from the growth of business which renders the asset inadequate, or to the decline of business. [Central R. Co. v. Martin, 30 F. Supp. 41, 60 (D.N.J. 1939)].